Apogee Enterprises (NASDAQ:APOG) and AAON (NASDAQ:AAON) Head to Head Review

AAON (NASDAQ:AAON) and Apogee Enterprises (NASDAQ:APOG) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Analyst Ratings

This is a summary of current recommendations for AAON and Apogee Enterprises, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AAON	0	3	4	0	2.57
Apogee Enterprises	0	2	2	0	2.50

AAON currently has a consensus target price of $123.33, suggesting a potential upside of 43.14%. Apogee Enterprises has a consensus target price of $70.50, suggesting a potential upside of 73.69%. Given Apogee Enterprises’ higher possible upside, analysts clearly believe Apogee Enterprises is more favorable than AAON.

Volatility and Risk

AAON has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Apogee Enterprises has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Valuation & Earnings

This table compares AAON and Apogee Enterprises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AAON	$1.44 billion	4.93	$107.59 million	$1.92	44.88
Apogee Enterprises	$1.40 billion	0.60	$54.13 million	$3.16	12.84

AAON has higher revenue and earnings than Apogee Enterprises. Apogee Enterprises is trading at a lower price-to-earnings ratio than AAON, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AAON and Apogee Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AAON	8.24%	17.32%	9.33%
Apogee Enterprises	4.68%	15.20%	6.83%

Institutional and Insider Ownership

70.8% of AAON shares are owned by institutional investors. Comparatively, 94.1% of Apogee Enterprises shares are owned by institutional investors. 18.1% of AAON shares are owned by company insiders. Comparatively, 2.0% of Apogee Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

AAON pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Apogee Enterprises pays an annual dividend of $1.08 per share and has a dividend yield of 2.7%. AAON pays out 20.8% of its earnings in the form of a dividend. Apogee Enterprises pays out 34.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. AAON has raised its dividend for 2 consecutive years and Apogee Enterprises has raised its dividend for 14 consecutive years. Apogee Enterprises is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

AAON beats Apogee Enterprises on 12 of the 17 factors compared between the two stocks.

About AAON

AAON, Inc., together with its subsidiaries, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment in the United States and Canada. The company operates through three segments: AAON Oklahoma, AAON Coil Products, and BASX. It offers rooftop units, data center cooling solutions, cleanroom systems, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils, and controls. The company markets and sells its products to retail, manufacturing, educational, lodging, supermarket, data centers, medical and pharmaceutical, and other commercial industries. It sells its products through a network of independent manufacturer representative organizations and internal sales force, as well as online. The company was incorporated in 1987 and is based in Tulsa, Oklahoma.

About Apogee Enterprises

Apogee Enterprises, Inc. provides architectural products and services for enclosing buildings, and glass and acrylic products used for preservation, protection, and enhanced viewing in the United States, Canada, and Brazil. The company operates in four segments: Architectural Framing Systems, Architectural Glass, Architectural Services, and Large-Scale Optical (LSO). The Architectural Framing Systems segment designs, engineers, fabricates, finishes, and installs custom glass and aluminum window, curtainwall, storefront, and entrance systems for the exterior of buildings primarily in the non-residential construction sectors. The Architectural Glass segment provides a range of high-performance glass products for use in windows, curtainwall, storefront, and entrance systems. The Architectural Services segment integrates technical services, project management, and field installation services to design, engineer, fabricate, and install building glass and curtainwall systems. The LSO segment manufactures high-performance glazing products for the custom framing, fine art, and engineered optics markets. The company’s products and services are primarily used in commercial buildings, such as office buildings, hotels, and retail centers; institutional buildings comprising education facilities, health care facilities, and government buildings; transportation facilities, such as airports and transit terminals, as well as multi-family residential buildings. It markets its architectural products and services through direct sales force, independent sales representatives, distributors, and glazing subcontractors and general contractors; and value-added glass and acrylics through retail chains, as well as independent distributors to museums, galleries, and other customers. The company was incorporated in 1949 and is based in Minneapolis, Minnesota.